Part 4/8:
Cameron pointed to passive investing's immense influence over market dynamics in 2024. With significant inflows into the market, traditional valuation metrics seemed irrelevant. Citing the CAPE ratio's alarming figures, she indicated a concerning trend of inflated valuations not entirely supported by earnings growth.
The discussion emphasized the importance of maintaining valuation discipline, especially amid rising passive flows concentrating on high-growth companies. Cameron believes this environment is ripe for opportunities among value and midcap indices, which have lagged behind growth counterparts—encouraging a reallocation toward these segments.